Date: 19991110
Docket: A-1047-96
MONTRÉAL, QUEBEC, WEDNESDAY, NOVEMBER 10, 1999
| BEFORE: DÉCARY J.A. |
LÉTOURNEAU J.A
NOËL J.A.
BETWEEN:
JEAN DENIS CÔTÉ,
Appellant,
AND:
HER MAJESTY THE QUEEN,
Respondent.
JUDGMENT
The appeal is dismissed with costs.
| Robert Décary J.A. |
Certified true translation
Bernard Olivier, LL. B.
Date: 19991110
Docket: A-1047-96
| CORAM: DÉCARY J.A. |
LÉTOURNEAU J.A
NOËL J.A.
BETWEEN:
JEAN DENIS CÔTÉ,
Appellant,
AND:
HER MAJESTY THE QUEEN,
Respondent.
Hearing held at Montréal, Quebec, Monday, November 8, 1999
Judgment rendered at Montréal, Quebec, Wednesday, November 10, 1999
REAONS FOR JUDGMENT BY: LÉTOURNEAU J.A.
CONCURRED IN BY: DÉCARY J.A.
NOËL J.A.
Date: 19991110
Docket: A-1047-96
| CORAM: DÉCARY J.A. |
LÉTOURNEAU J.A
NOËL J.A.
BETWEEN:
JEAN DENIS CÔTÉ,
Appellant,
AND:
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
[1] Despite the very eloquent submissions of counsel for the appellant, I consider that this appeal cannot succeed and that the Minister of National Revenue was justified in 1988 in taxing the appellant on all of the capital gain from the sale of shares purchased by the appellant, as he and his wife had been married since 1959 in community of property restricted to acquests and these shares were part of the property in that community.
[2] It is impossible, as counsel for the appellant urged the Court to do, to distinguish Sura v. M.N.R., [1962] S.C.R. 65, and exclude its application and the principles derived from it, namely that the spouses are, it is true, co-owners of the community property but for tax purposes other factors should be considered.1
[3] Among these factors, the Supreme Court noted the fact that the husband held all the attributes of ownership and absolute enjoyment of the property, the wife did not have the plenitude of rights ordinarily conferred by ownership, her right being dismembered, inferior, stagnant and sterile, and the plenitude of the right of ownership (that is, the jus utendi, fruendi et abutendi) only accrued on dissolution of the community (Sura, at 72).
[4] In view of the nature of the ownership which under her matrimonial regime accrued to the appellant"s wife over community property, it is not possible to conclude that for tax purposes she acquired ownership of community property in the year it was purchased by her husband, who administered the community property by himself, or that she acquired the proceeds of disposition of that property within the meaning of ss. 39(1)(a ) and 54(c)(i) of the Income Tax Act in the year in which it was sold by him. Except in the event of dissolution of the community, she had no right to her share of the said proceeds or the income it might generate and could not claim either from her husband, who had full enjoyment and could dispose of all the property.
[5] For the purposes of the proceedings at bar the appellant and his wife are governed by a matrimonial regime which was certainly popular at the time but which today is singular and surprising. However, it is a regime which they chose to adopt and did not subsequently alter. I am bound by the legal consequences of that regime as desired and expressed by the Quebec legislature, and from which unavoidably follow the tax consequences which the appellant is seeking to avoid.
[6] For these reasons, the appeal from the decision of the Tax Court of Canada by Judge Archambault on November 13, 1996 should be dismissed with costs.
| Gilles Létourneau J.A. |
I concur.
Robert Décary J.A.
I concur.
Marc Noël J.A.
Certified true translation
Bernard Olivier, LL. B.
| FEDERAL COURT OF CANADA APPEAL DIVISION Date: 19991110 Docket: A-1047-96 BETWEEN: JEAN DENIS CÔTÉ, Appellant, AND: HER MAJESTY THE QUEEN, Respondent. REASONS FOR JUDGMENT |
FEDERAL COURT OF CANADA
APPEAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| COURT No.: A-1047-96 |
| STYLE OF CAUSE: JEAN DENIS CÔTÉ, |
Appellant,
AND:
HER MAJESTY THE QUEEN,
Respondent.
PLACE OF HEARING: Montréal, Quebec
| DATE OF HEARING: November 8, 1999 |
REASONS FOR JUDGMENT OF THE COURT (DÉCARY, LÉTOURNEAU AND NOËL JJ.A.)
DATED: November 10, 1999
APPEARANCES:
| Wilfrid Lefebvre for the appellant |
Sébastien Gingras
| Sophie-Lyne Lefebvre for the respondent |
Diane Lemery
SOLICITORS OF RECORD:
| OGILVY, RENAULT for the appellant |
Montréal, Quebec
| Deputy Attorney General of Canada for the respondent |
Ottawa, Ontario
__________________1 In M.N.R. v. Simon and General Trust of Canada, [1977] 2 S.C.R. 812, at 814 and 815, the Supreme Court of Canada applied the Sura finding that division on the dissolution of the community is declaratory and does not transfer ownership, but left open the question of whether the spouses were co-owners of the property while the community was in existence.